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February 13, 2015

Cloud accounting: a match made in heaven?

The technology side of the industry is not this magazine’s strength. Founded in 1874, and arguably being the oldest accountancy outlet in the world, it’s not easy to teach an old dog new tricks.

But many, in a more Darwinist vein, would argue that one should adapt or perish. In our case this doesn’t mean we’ll neglect what we do best: give exclusive coverage and insights into the core of this business from a global perspective.

Tackling the ever-changing regulatory maze, predicting the risks of legislative changes, and foreseeing the underlying risks of megatrends for global practitioners will continue to be our focus.

Having said that, we appreciate that a techy revolution has broken out from within the industry, with significant implications regarding how the profession masters its craft.

Software that crunches the numbers for business owners and accountants, and frees them from the tyranny of bookkeeping and other inconvenient but necessary toiling such as payroll, invoicing or payments would seem like science fiction.

To top that, every working document can be written in the sky, a metaphorical way of describing a wonder by the name of the cloud.

And needless to say, those wizards of accounting are creating a parallel market in its own right in which some household names have started to resonate loud -even for those like me who haven’t closely followed this apparently profitable game.

Take the FTSE 350 company Sage Group and its down under competitor Xero, listed both on New Zealand and Australia’s stock exchanges. Industry quarrels among the two are prone to intensify, one would imagine.

At its London conference held this week, Xero’s desire seemed to put forward a clear message out there: it wants to be identified as a Silicon Valley’s new kid on the block, versus the well-established British rival Sage.

Xero has even plans to launch an IPO in the US. Let’s see what other contenders, such as Intuit or Iris, have to say. This is clearly an appealing global market to watch in 2015.

Judging by the outcome of its London conference, another key strategy Xero seems to be delivering is to present itself as an ally of the SMEs, which are the true jobs creators and the engine of any country’s economic growth.

At the conference Xero gave its awards to its partners and affiliates and one name stood out from the rest as KPMG, a partner since March 2014, snatched the Innovation Award.

Could it be a coincidence that KPMG is the one firm amongst the Big Four that more evidently targets the SME segment? Possibly not.

But wait a minute, what if KPMG rolls out the software platform globally? What if a Xero’s competitor does so with another Big Four or mid-tier? That could be a match made in heaven. And all thanks to the cloud.

 

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